Pak external debt doubles in decade

World Bank report highlights surge to $135.1 billion

ISLAMABAD:

Pakistan's total external debt nearly doubled over the decade ending in 2025, reaching $135.1 billion, according to the World Bank's International Debt Report 2026.

The report shows that the country's external debt increased from $68.673 billion in 2015 to $135.107 billion in 2025. The total comprised $107.076 billion in public and publicly guaranteed debt, $17.58 billion in private non-guaranteed debt and $10.45 billion in short-term debt.

Of the public and publicly guaranteed debt, $56.83 billion was owed to multilateral creditors, $42.43 billion to bilateral lenders and $7.8 billion to private creditors.

China remained Pakistan's largest individual creditor, with $22.4 billion outstanding, followed by the World Bank with $19.2 billion and the Asian Development Bank (ADB) with $16.83 billion.

In 2025, China extended the repayment period for $2 billion in loans to Pakistan.

Meanwhile, the International Monetary Fund (IMF) provided $2.3 billion in fresh financing under its Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) to support the country's long-term economic stability.

According to the report, the external debt of developing countries jumped 5.5% to a record $9.4 trillion in 2025, the fastest pace since 2021 and about four times the 2022–24 average.

Access to international finance has improved, but the price of finance has not, and high debt burdens in the poorest countries threaten to crowd out essential investments in people.

Private financing drove much of the increase.

Borrowing from private creditors jumped and bond issuance from public entities rose nearly 35% to $251 billion, the highest level in five years as markets reopened to many developing countries.

External debt grew fastest among the most vulnerable countries, increasing 8.1% to $1.3 trillion in countries eligible for concessional financing from the World Bank Group's International Development Association (IDA).